Why Console Gaming Is Dying

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Electronic Arts and Square Enix lost their CEOs. LucasArts has
been shuttered. Big publishers can't stay in the black, and
smaller developers are disappearing for failing to meet absurd
sales goals.

You don't have to be an industry analyst or hardcore gamer to
realize that something is wrong with the gaming business. In this
respect, Sony's upcoming PlayStation 4 (and, by extension,
Microsoft's inevitable new Xbox) is more than just a new console:
It represents the changing tastes of a volatile market, and the
potential last gasp of modern big-budget gaming. Lack of user
interest and prohibitive development costs may make further
console generations impossible.

Sony has revealed relatively few details about the PS4, despite
holding an enormous media extravaganza on Feb. 20. It
demonstrated a couple of games (largely sequels in established
series), demoed its graphics (impressive, but not much better
than the PS3's) and promised to be a friendly space for indie
developers (without saying how). A controller (that looked a lot
like the current one) was on display, but the console itself was
nowhere to be seen.

Neither fans nor investors found the display very impressive.
Buzz among games journalists and forum denizens was lukewarm, at
best, and Sony's stock took a dive almost instantly following the
event.

How did gaming arrive in this state?This kind of indifference to
consoles is the rule, not the exception. Gamers are seldom
excited about console releases anymore, and big-budget titles are
often a risky proposition. Mainstream titles already cost tens of
millions of dollars to release, and these numbers will only
increase as developers navigate the intricacies of the PS4, Wii U
and the next Xbox.

Raw system power is not enough to generate either hype or sales.
When Sony's handheld PlayStation
Vita launched in December 2011, it boasted the most powerful
specs ever for a dedicated handheld system, but a relatively weak
game lineup. Japanese fans did not consume it in droves. In fact,
its predecessor, the PlayStation Portable, continued to outsell
it for weeks. Western consumers did not embrace the system much
more enthusiastically when it launched in North America and
Europe a few months later.

Not even stalwart Nintendo can withstand gamer apathy. Nintendo's
latest console, the Wii U, launched in November 2012, may be in
trouble as well. By the end of the year, it has sold slightly
more than 3 million units — about the same as the original Wii.
The story changed a month later, when Wii
U sales slowed to a crawl, moving fewer than 60,000 units.
With no must-have software on the horizon to bolster it, the Wii
U has a rocky road ahead. [See also:
The 10 Most Stunning Video Games ]

Quality games from major publishers could be in short supply in
the coming days, though. Disney shut down LucasArts, the
legendary developer behind many of the "Star Wars" titles. Square
Enix lost its CEO in Japan, and slashed its North American staff,
not even sparing its president.

The games industry does not have a healthy attitude toward
keeping studios together in the long-term. High Moon Studios, the
developer behind the new Marvel Comics " Deadpool "
game, lost 40 staffers immediately upon the game's completion,
despite having plenty of funding.

EA, as usual, is in a league of its own. The "SimCity" debacle,
which rendered one of its most anticipated games unplayable, is
still ongoing one month after release. After EA-owned developer
Visceral's "Dead Space 3" failed to meet unrealistic sales
expectations, EA fired a number of staffers in Los Angeles and
shut down Visceral Games Montreal entirely.

If the
PS4 succeeds, it could stave off a sea change in the industry
for a few more years: Gamers dropping lots of money on
traditional console titles would keep the market viable for the
time being. If not, big-budget gaming could be at its end,
opening the doors for midsize and independent developers to
flourish again.